The e-way jam: Use of RFID tags can resolve the issue

The widespread disruption following the compulsory introduction of the electronic way (e-way) bill from February 1 and its postponement the same evening underscore, yet again, the challenges of patchy implementation of the goods and services tax (GST). Indeed, the February 1 cut-off date for e-way bills for the movement of consignments above Rs 50,000 was imposed just as the multiple problems from the early introduction of the GST had begun to recede. The e-way bill deadline had looked challenging even when it was decided in December; more so since 15 states had simultaneously opted to follow the same deadline for the introduction of intra-state e-way bills. The fact that the Centre chose to stick with the deadline even when it was clear that the network was ill-equipped to bear the increased load points to a disregard for ground realities, despite statements to the contrary. The GST Network portal had crashed in several states two days before, bringing truck movements to a virtual standstill. On D-Day, this saga was repeated nationwide, a debacle that escaped media scrutiny only because of the Budget. 

Several issues arise as a result of the government’s decision to postpone the e-way bill deadline indefinitely. First, as a process, the requirement for an e-way bill hardly counts as a significant improvement over the earlier practice. In fact, it is virtually an electronic version of the way bill in the value-added tax (VAT) regime and, ironically, still requires to be carried as a physical printout for the benefit of the checking authorities. This e-replication perhaps explains why the interminable queues at inter-state checkpoints have not abated. Ironically, the e-way bill is intended to be a means of reducing not just these roadblocks that seriously harassed transporters but also to eliminate the endemic practice of under-invoicing and tax evasion. The e-way bill does not appear to address this issue in a robust manner. Second, the government is now exploring other options. Among them is introducing the system for intra-state movements first and testing the network’s load-bearing ability before rolling it out for inter-state movements. The possibility of initially limiting the e-way bill to higher value consignments is another. These are obvious enough to raise questions as to why the government did not consider them first, thereby saving itself considerable embarrassment and businesses even more disruption. 

The frequent network glitches, especially when filing deadlines approach, suggest that the government may find it useful to explore options to track goods movements that do not burden the core GSTN network. RFID tags for goods and/or consignments, for instance, could be one useful alternative. Though it is true that introducing such a system will require the creation of an enabling network, it is worth recalling that the introduction of RFID tags had been considered as a means of improving traffic management for new vehicles and driver’s licences as far back as 2007. Now, these objectives could profitably be merged for a nationwide network. The e-way bill debacle suggests that the government urgently needs to explore creative solutions so that the benefits of introducing the GST are not subsumed by the very Indian failing of poor implementation.